Strict construction of exemption notifications defeats excise relief for fish oil made outside the specified factory class.

An exemption notification must be applied strictly according to the class of factory or manufacture it expressly covers; fish oil produced in a fish meal plant did not fall within a notification limited to goods manufactured in the factories listed in the Schedule, so the exemption from excise duty was unavailable. On limitation, the demand was not barred where the record showed the assessee had been asked to obtain an excise licence, had applied for one, and then took no further effective step after the defective licence was returned; those facts did not defeat the extended recovery period.

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Issues: (i) Whether fish oil produced in a fish meal plant was entitled to exemption from excise duty under Notification No. 115/75 dated 30-4-1975 issued under Rule 8 of the Central Excise Rules, 1944. (ii) Whether the demand was barred by limitation in the absence of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty.

Issue (i): Whether fish oil produced in a fish meal plant was entitled to exemption from excise duty under Notification No. 115/75 dated 30-4-1975 issued under Rule 8 of the Central Excise Rules, 1944.

Analysis: The exemption applied to goods manufactured in the factories specified in the Schedule to the notification. The Schedule included oil mills. The fish oil in question was manufactured in a fish meal plant and not in an oil mill. The notification was therefore inapplicable on its plain terms.

Conclusion: The claim to exemption was rightly rejected and the fish oil was not exempt from excise duty.

Issue (ii): Whether the demand was barred by limitation in the absence of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty.

Analysis: The record showed that the appellants had been called upon to obtain an excise licence, had applied for one, and had thereafter done nothing when the defective licence was returned. In those circumstances, the conduct did not assist the appellants in resisting the extended demand period.

Conclusion: The challenge to the demand on limitation failed.

Final Conclusion: The exemption claim failed and the duty demand was sustained, leaving no basis to interfere with the dismissal of the appeal.

Ratio Decidendi: An exemption notification must be construed according to the class of factory or manufacture to which it expressly applies, and a product manufactured outside that class is not entitled to the exemption; limitation objections also fail where the conduct supports invocation of the longer recovery period.

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